The fourth quarter of the year has just begun, and the holidays are around the corner. Forecasts from MasterCard and Deloitte suggest that holiday spending will rise by roughly the rate of inflation – that is, virtually no gains in real terms – though e-commerce may be quite a bit stronger. In the meantime, recent data from the Federal Reserve show that consumers have more savings available to spend than previously thought.
With uncertainty still hanging heavily in the air, investors and managers are eager for any sign of where the economy might be going in the fourth quarter. Because businesses can book shifts well in advance on the Instawork platform, we have some idea of what the demand for labor will be for the rest of this month and in the crucial months to come.
To see how early bookings looked for the holiday season this time last year, we can compare bookings in September 2022 to bookings as of the end of that month for the following three months:
Manufacturers booked by far the most shifts in advance, relative to their total bookings for September 2022. By the end of that month, they already had 20% as many shifts booked for December 2022. By contrast, our Partners in other industries had barely booked at all for December. Partners in accommodation and food services (hospitality) came in a distant second in November 2022.
Now let's see how the same trends are shaping up this year:
This year manufacturers did not book as many shifts for November and December, but there were slightly more early bookings in every other sector except arts, entertainment, and recreation. Early bookings doubled for accommodation and food services (hospitality), and they quintupled for transportation and warehousing (logistics) and wholesale and retail trade.
Evidently, folks are still ready to party – this is a strong signal that spending on services hasn't tapped out yet. These data also support the forecast for a strong holiday season in e-commerce, with the emphasis on logistics and trade.
By contrast, manufacturers may have reason to be cautious this year. They were caught flat-footed in 2022 by the buildup of inventories in the supply chain, and so they may be waiting to see whether there really is enough demand to justify additional hiring this year. Most of the goods that will be sold over the holidays have already been made – the question is how many will still be on the shelves early in 2024.
Even though Partners in some sectors may not book shifts far in advance, they do end up booking plenty of shifts to deal with the boost to economic activity. Wholesale and retail trade businesses hadn't booked many shifts for December 2022 as of the end of September 2022, but they still ended up bringing in plenty of our Pros. Their total bookings for December amounted to almost 180 times the early bookings they had made for that month by the end of September:
Not surprisingly, the increase in manufacturing was nowhere near as large. After all, manufacturers made many more early bookings. But why did Partners in wholesale and retail trade wait so long to book shifts?
For one thing, the enormous network of Pros on the Instawork platform – they now number 5 million – can make finding workers on short-notice relatively easy. Yet Partners who book late on our platform do risk lower fill rates, or at least having to pay more to fill shifts urgently. The question is whether labor demand in wholesale and retail is really less predictable than in, say, manufacturing.
Manufacturers receive orders in advance, but the shopping sprees of the holiday season are also a pretty regular phenomenon. This year, early bookings in wholesale and retail trade are pretty similar to last year. Perhaps these Partners are showing justifiable caution... yet could they secure their labor more reliably, and at lower cost, if they booked sooner?
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 8/31/2023 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
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